Federal Circuit Limits Divided Infringement in Akamai v. Limelight

Method claims of patents may, in some circumstances, be less desirable since liability for patent infringement may be avoided by, loosely speaking, offloading one or more steps of the patent’s claims to another party. In the following case, the defendant avoided patent infringement even though it performed all of the method steps of the patent owner’s claimed invention by offloading one step which the defendant’s customers could optionally perform.

In Akamai v. Limelight (Fed. Cir. 2015), Akamai is the patent owner of a pioneering patent related to the current method of streaming content to internet users. Akamai owns the patent for streaming content to internet users in a distributed manner so that no one server is burdened with delivering all of the web content on a page to the internet user. The burden of delivering content rich websites is shared so that the content in an overall sense can be delivered to the internet user faster.

Limelight is Akamai’s competitor in what is referred to as content delivery network service or CDN. The difference between Limelight’s CDN service and Akamai’s patent is not significant. Limelight performs all of the steps in Akamai’s patented claimed invention except for one step – tagging – which Limelight allows the customer to perform. Limelight also provides customer service to assist customers with such tagging step as well. Limelight appears to do all that it can so that the end user can perform that one step of tagging. The saving grace for Limelight is that the contract between Limelight and the customer does not require the customer to perform the tagging step. The customer need only do the tagging step if the customer desires to take advantage of Limelight’s CDN service.

The majority opinion held that direct infringement liability of a method claim under 35 U.S.C. §271(a) exists when all of the steps of the claim are performed by or attributed to a single entity (i.e., single entity rule). The actions of one party are attributed to another party under a theory of vicarious liability so as to impose direct infringement liability in at least three different situations, namely, principal-agent relationships, contractual arrangements, and joint ventures.

Principal-agent relationships and joint ventures are easy to spot but “contractual arrangement” situations are tougher to parse out. Obviously, the contract between Limelight and its customers is not the type of “contractual arrangements” contemplated by the court since the court held that Limelight was not liable for direct patent infringement. In contrast to the instant Limelight situation, the court said that when a contract mandates the performance of all steps of a claimed method, each party to the contract is responsible for the method steps for which it bargained. The court’s focus is on the whether the contract required or mandated one party to perform a step which completes the infringement.

The majority relied on legislative history to reject Akamai’s argument for broadening the definition of direct infringement so as to include situations such as Limelight. The majority reasoned that the 1952 Patent Act eliminated liability for tortious types of infringing behavior and imposed liability for the actions of others based only on vicarious liability. The dissent makes a plea that statutory construction, if followed, leads to the conclusion that Limelight’s behavior should constitute direct patent infringement and should not be encouraged.

Legislative history and statutory construction are the stated reasons for the majority and dissenting opinions but other more philosophical reasons exist. The majority on page 24 of its slip opinion cites to the possibility of more patent trolling behavior arising if the decision were to adopt the broader definition desired by the dissent. The dissent paints the instant invention in terms of its pioneering and revolutionary impact to the internet and argues that the patent owner should be rewarded for it.

Regardless of where one stands of the philosophical points of view, the opinion provides guidance in terms of when “divided infringement” actually imposes liability for patent infringement. When a mastermind offloads one or more steps of a claimed method to another entity, then the actions of that other entity are vicariously attributed to the mastermind only if the relationship is one of a principal-agent or joint enterprise, or if there is a contract between the parties requiring or mandating the other entity to perform the offloaded method step. Whether other terms that limit the vicarious nature of a contract might impose liability will have to be litigated in the future.

In the court’s decision, the majority also placed the burden of avoiding these types of situations on the drafter of the patent. The solution for Akamai was to craft a claim identical to the one being asserted against Limelight but without the tagging limitation. This is simple to say but may be significantly more difficult to do since it is difficult to anticipate all ways by which a claim might be avoided due to changes in technology and other factors. Another means of mitigating these types of problems is with the filing of a continuation patent application. Continuation practice can be costly but for pioneering technology such as CDN, the cost for filing multiple continuation patent applications is miniscule compared to the value of recrafting a claim to encompass and enjoining the behavior of Limelight.


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One comment so far.

  • [Avatar for Anon2]
    May 21, 2015 11:46 am

    Rather than dispensing altogether with the tagging limitation, substance regarding the tagging could still be included if needed for inventiveness, but it could be claimed as context for the method rather than part of the actual method itself.